Collector's Refusal To Call For Originals In Case Of Deficient Stamp Duty Doesn't Curtail Court's Power To Impound Document: Chhattisgarh HC

Justice Rakesh Mohan Pandey in his order said, “In the present case, the documents were referred to the Collector (Stamps) by the learned Trial Court and he declined to exercise his power according to the proviso to Section 48B of the Stamp Act, but the decision taken by the Collector (Stamps) would not curtail the power of the Court to impound the document according to the Section 33 of the Stamp Act. The legislature has conferred the power to the Court to adjudicate proper stamp duty and penalty, if any, while impounding the document and thereafter for recovery proceedings, the documents can be referred to the Collector (Stamps).”

Background

The Court was dealing with a writ petition challenging an order passed by the Civil Judge rejecting an application moved by the plaintiffs under Section 151 CPC for impounding of a document.

Initially, the petitioners had filed a suit for declaration of title and possession over the suit property which was, as pleaded by the petitioners (plaintiffs in the initial suit), partitioned between them. An agreement, along with a stipulation of conditional deed, was executed and the partition deed was later executed on 15.07.1973. When the defendants denied the averments made in the plaint, the petitioners moved an application for impounding of the unregistered stipulation of conditional agreement and the agreement. Consequently, the trial Court referred the documents to the Collector (Stamps) to ascertain deficit stamp duty and the Collector intimated that the documents were executed 5 years prior to the date of their presentation, therefore, according to the provisions of Section 48B of the Stamp Act, the recovery of deficit stamp duty would not be appropriate.

Consequently, the petitioners moved an application under Section 151 of CPC for the impounding of documents, however, the trial Court, vide the impugned order, rejected the application on the ground that the documents were returned by the Collector and no steps were taken by the petitioners for three years. Aggrieved, the petitioner challenged the order before the High Court.

It was the case of the petitioner that the power of the Collector under Section 48B of the Stamp Act is entirely different from the power of the Court under Section 33. Additionally, it was urged that while the Collector refused to pass any order for recovery of deficit stamp duty referring to the bar contained in the section, there was no bar in Section 33 and the Court can exercise the power to impound the documents.

The respondents countered by arguing that that the Collector had refused to pass any order as the documents were executed five years prior to the date of their presentation and the impugned order rightly rejected the application on the ground that the same was moved with a delay of 03 years.

Findings

The Court, after examining Section 33 of the Stamp Act, noted that the provisions of the section enact that if an instrument is produced before the authority or received as evidence and it appears to the Court or the authority that the same is not duly stamped, the Court shall impound the same. For such impounding, the concerned authority shall examine the instrument to determine whether it is stamped with the stamp of value and description required by law. No limitation is provided to adjudicate impounding of the document not duly stamped.

The Court further examined Section 48B which enacts the Collector may order the production of the original document in case of noticeable deficiency of stamp duty in order to satisfy himself with respect to the adequacy of amount of duty paid. The section further prescribes that the Collector shall presume that the original document is not duly stamped if it is not produced within the specified period of time. Proviso to the section contemplates that no action shall be taken after a period of five years from the date of execution of such instrument.

The Court relied on the Supreme Court's ruling in Black Pearl Hotels Private Limited v/s Planet M Retail Limited, [(2017) 4 SCC 498], to observe that Section 33 makes it amply clear that the documents can be referred to the Collector to decide the issue as to whether it is duly stamped or not. Further, the Court held that denial by Collector to exercise his power, as per proviso to Section 48B, cannot curtail the power of the Court to impound the document according to the Section 33.

With regard to the contention of the respondents that the application under Section 151 of CPC suffered from a delay of three years, the Court further held,

“…the technicalities should not defeat the justice. The petitioners produced the original document along with an application for impounding the document, the learned trial Court ought to have exercised the power under Section 33 of the Stamp Act and after impounding the documents, the documents could have been referred to the Collector (Stamps) for assessing the deficit stamp duty.”

The Court thus held that the civil judge's order was not sustainable and accordingly allowed the petition.

Case Title: Shyamlal v. Rambai

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